revolution is under way, and the North American automobile industry is where this international competitive drama is being played out,
according to General Motors Vice President J. Ignacio Lopez de
Arriortua.

"The solution to today's economic problems can only be found in new thinking and new processes. Conventional solutions no longer work," Mr. Lopez said today at the "Gearing Up" manufacturing forum co-sponsored by GM's Saginaw Division.
Mr. Lopez, in charge of GM's Worldwide Purchasing organization, said the first industrial revolution occurred some 200 years ago in the textile industry with introduction of textile machinery. The traditional hand-craftsmen were in crisis when these machines proved able to produce better and cheaper clothes.
The second industrial revolution was the advent of mass production -- and from that sprung the glory days in the North American automakers for those companies that changed to meet this challenge.
Unlike the first two, the third industrial revolution is not based on technological change. "It is a change in management philosophy. And at the core of this change in the customer," Mr. Lopez said.
"The road ahead won't be easy," he said. "The American auto industry already faces tremendous challenges as we go forward." He noted that one of our every seven jobs in the United States depends on the American auto industry.
"For those of us whose lives depend on a healthy and strong American auto industry, this emphasis on customer satisfaction is absolutely essential if we hope to remain the world's leading economic power and provide a standard of living for our people that is second to none," he said.
"Customer satisfaction is the center of our efforts to succeed in the third industrial revolution. If we want to win, we must have the strongest desire to win by being the best in terms of quality, service and price," Mr. Lopez explained. "By doing this, we'll create more value in our products. We'll be able to pass more value on to our customers, increasing their satisfaction and maintaining their loyalty. By keeping our customers, our competitors will have no chance."
This customer focus is the basis for GM's new global sourcing strategy. "We're concentrating our efforts on selecting suppliers who put the customer first in everything they do in terms of quality, service and price."
GM's purchasing efforts, which include assisting its suppliers in their quest to create more value and to meet customer satisfaction goals, uses a technique known as PICOS -- Purchased Input Concept Optimization with Suppliers. PICOS helps to identify and eliminate waste in specific processes and significant results are realized within days.
GM has worked together with its suppliers in PICOS workshops worldwide. So far in North America, PICOS workshops have been held at 45 GM and non-GM supplier locations. The significant results of those efforts, on average, included a 63-percent increase in productivity, material in process was decreased 56 percent, and lead time was improved 61 percent.
The majority of the benefits of this customer-focused manufacturing concept can be achieved without investing in new technology, Mr. Lopez noted. "The issue here is creativity, not investment ... We must be aggressive and creative in our efforts to survive and prosper," he said.
"Any company's success is based on the spirit of its people," Mr. Lopez said.
"Their test of greatness is how the people join and work together in periods of crisis and challenge," he said. "We have a challenge today to see who will lead the automotive industry into the next century. This challenge cannot paralyze us. Instead, it must energize us. Working together with suppliers, manufacturers must create value and pass it on to their customers."
Mr. Lopez said the global sourcing strategy being implemented by GM is a challenging one, requiring significant change in the basic approach to manufacturing. The customer-focused manufacturing concept means producing what the customer needs, in the right amount and at the right time with the world's best quality, service and price.
"We need our suppliers to work together with us, to help us achieve our vision of having exciting products and satisfied customers, created by people working together to win," he said.
-0- 8/25/92
/CONTACT: Toni Simonetti of General Motors, 313-556-2035/
(GM) CO: General Motors Corporation ST: Michigan IN: AUT SU:

SM -- DE010 -- 2949 08/25/92 10:27 EDT

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